Yahua Consulting comment: China’s coal-to-oil industry surpassed South Africa in 2015

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This post was last edited by jordan569 on 2013-1-6 at 22:46. Yaha Consulting believes that, with the continuous development of technologies based on independent intellectual property rights, the successful implementation of industrial demonstration projects, and increasing investment in coal-to-oil projects, by 2015 China’s coal-to-oil industry will surpass that of South Africa by a large margin. At the end of 2008, despite the global spread of the economic crisis and the sluggish markets for energy and commodities, China’s coal-to-oil industry continued to see good news and make successive breakthroughs. Luan’s 10,000-tonne cobalt-based catalyst fixed-bed unit produced oil products on December 22, 2008. On December 31, 2008, the 1.08 million tons per year direct liquefaction coal-to-oil project of Shenhua Coal-to-Oil Chemical Co., Ltd. in Ordos completed all its processes, producing qualified oil products and chemical substances; further adjustments will be made to ensure stable operation over extended periods of time. This means that 2009 will be the year when China makes decisive progress in the coal-to-oil industry. According to Yahua Consulting’s statistics, China’s total coal-to-oil production capacity in 2009 was approximately 1.6 million tons. In addition to the operation of Shenhua Ordos’s direct liquefaction coal-to-oil project, the 160,000 tons per year indirect liquefaction coal-to-oil projects built by Lu’an, Yitai, and Shenhua using technology from the Shanxi Institute of Coal Chemistry under the Chinese Academy of Sciences are also expected to come online in the first half of 2009. In addition, the 50:50 joint venture project between Shenhua and Sasol for indirect coal-to-oil production, located at the Ningdong facility in Ningxia, is currently undergoing phase two feasibility studies, with construction set to begin by the end of 2009. In addition, Yankuang’s independently developed 1 million tons per year indirect coal-to-oil project in Yulin, Shaanxi, passed the environmental impact assessment in principle on December 11, 2008, and is expected to make new progress in 2009. According to the draft of the **Medium- and Long-Term Development Plan for the Coal Chemical Industry** released at the end of 2006, China’s coal-to-oil production capacity was expected to reach 1.5 million tons by 2010, 10 million tons by 2015, and 33 million tons by 2020. Yahua Consulting believes that with the successful operation of the demonstration projects and the verification of the industrialization technologies, from the perspective of energy security strategies, **relevant plans and policies should be introduced to encourage the development of the coal-to-oil and coal chemical industries. At present, Shenhua has mastered a million-ton-scale coal-to-oil direct liquefaction technology with independent intellectual property rights. Yankuang’s industrial test facility for low-temperature coal indirect liquefaction for coal-to-oil production, which relies on its own intellectual property, has passed verification. The iron-based slurry-bed Fischer-Tropsch synthesis oil technology developed by the Shanxi Institute of Coal Chemistry, Chinese Academy of Sciences, will also undergo industrial demonstration at Lu’an, Yitai, and Shenhua in 2009, with further expansion of production capacity. Based on the respective plans of leading coal-to-oil companies such as Shenhua, Yankuang, Lu’an, and Yitai, Yaha Consulting estimates that by 2015, China’s actual production capacity in the coal-to-oil industry will exceed 12 million tons. As is well known, South Africa began developing its coal-to-oil industry in the 1950s, which was related to the apartheid regime in the country at that time as well as sanctions imposed by the international community. According to data released by Sasol, there are also economic incentives for South Africa to develop coal-to-oil production: limited crude oil reserves ； Large coal reserves ； Agriculture and mining require industrialization ； An increasing population requires more job opportunities ； Reduce crude oil imports to maintain foreign exchange reserves. Furthermore, the rise in oil prices in the 1970s led to the establishment of large-scale facilities in South Africa. Sasol in South Africa is currently the only company in the world to have industrialized Fischer-Tropsch synthesis technology on a large scale, and its liquefaction technology is leading globally. South Africa also has the world’s largest coal liquefaction capacity for synthetic fuels. The annual coal-to-oil production capacity is 7.2 million tons. To date, whether in terms of industrialization technology or production capacity, South Africa is the world’s leading country in the coal-to-oil industry. According to statistics from Yaha Consulting, by the end of 2008, South Africa’s total capacity for producing synthetic fuels was 9.5 million tons per year, which accounted for 30% of the country’s total fuel consumption. Among them, Saso Corporation has two production facilities: the Saikunda plant, which uses coal as its main raw material and has a petroleum production capacity of 7.2 million tons ； Together with the Sasolburg plant, it uses natural gas as the main raw material, with an oil production capacity of 300,000 tons. Additionally, South Africa’s **oil company also has a synthetic oil plant that uses natural gas as its main raw material; the technology is provided by TotalEnergies, and the plant’s production capacity is 2 million tons per year. South Africa currently has two coal-to-oil projects: a joint venture between the South African Industrial Development Corporation (IDC) and Sasol, and a coal-to-oil project owned by PetroSA. The total investment in the coal-to-oil project jointly developed by IDC and Sasol is approximately $17.2 billion, with the preliminary feasibility study for the project expected to be completed in March 2009. The project was jointly developed by Saso and IDC in a 51:49 partnership, with completion and operation expected by 2016. Yahua Consulting believes that the timelines for Sinopec and IDC’s coal-to-oil project in South Africa are almost identical to those of Shenhua’s joint venture project for the indirect liquefaction of 3.2 million tons of coal into oil at the Ningdong facility in Ningxia, China. PetroSA has recently announced that the coal-to-oil project has been put on hold, and it will continue to assess the feasibility of the project. Yahua Consulting believes that, at the current pace, South Africa’s coal-to-oil production capacity will not increase before 2015, remaining around 7.2 million tons per year. By then, China’s production capacity will exceed 12 million tons. At the same time, during the 12th Five-Year Plan period, both direct liquefaction and short-path liquefaction technologies with independent intellectual property rights in China will complete their industrial demonstration phases and enter the stage of large-scale application and promotion. Yahua Consulting predicts that as the global economy recovers and international oil prices rise, and once the economic viability of coal-to-oil production is ensured, China’s coal-to-oil industry, as an important part of its energy strategy, will experience orderly and rapid development, and will surpass South Africa in terms of capacity by 2015. . Note $ # , $ $